According to Ryan Gavin, senior director of Windows Live, there are currently …

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With the latest release (Wave 3) of both the Windows Live web services and Windows Live client applications, it would be quite interesting to see how many more users Microsoft is attracting. Of course, the company won't simply hand over those numbers unless they're astronomical. However, during a video interview with LiveSide, Ryan Gavin, senior director of Windows Live, did give an indication of the number of Hotmail and Messenger users:

Still people are surprised by the size of our existing base. We have close to half a billion Windows Live users on Hotmail and Messenger. And for that half a billion, this is a material upgrade for their experience.

Half a billion is a very large number, and something the Windows Live team should definitely be proud of. However, while Messenger may be the most popular IM service in the world, Hotmail is still second to Yahoo Mail, and generally speaking every other Windows Live applications or service has a long way to go on the world scale. It's very difficult to create an application or service that will cause users to start switching en masse, but that's the kind of challenge Microsoft loves (regardless of how much it costs them).